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Both Congress and the Pentagon oppose a cut to military pensions contained in last year’s bipartisan budget deal, but the rush to legislative action underscores a potentially big problem for the military: There is deep reluctance on Capitol Hill to make cost-saving changes to the military’s increasingly expensive benefits and compensation system.
Efforts to reverse the politically unpopular cut played out in both chambers this week, with House leaders briefly considering attaching it to the debt limit increase and then passing it separately Tuesday by a vote of 326-90, and the Senate debating a stand-alone measure (S 1963) offered by Arkansas Democrat Mark Pryor.
The legislative dilemma is not over what to do about the cut, but rather how to reverse it, with a flurry of bills from both parties offering various ways to offset the estimated $6 billion in cost savings generated from reducing by 1 percent the annual cost-of-living adjustment in pensions for working-age military retirees. Other proposals, including Pryor’s, simply seek to scrap the cut altogether.
When the COLA cut was first included in the fiscal 2014 budget resolution (PL 113-67), it seemed like the savings equivalent of low-hanging fruit, since it would merely slow the rate of growth and only affect working-age retirees, many of whom are in the civilian workforce. But the backlash on the Hill — and from the Pentagon — was swift and strong.
During a Jan. 28 Senate Armed Services Committee hearing, defense officials said they were not consulted during negotiations on the budget deal and want current service members and retirees exempt from any changes to the pension system. Vice Chairman of the Joint Chiefs of Staff James A. Winnefeld Jr. told the panel that the provision, which would not go into effect until December 2015, created “considerable and understandable anxiety” among military retirees and those planning for retirement.
Even so, there is broad consensus in the Pentagon that the department’s rising personnel costs threaten investments in other areas, from the routine costs of operating and maintaining the military to its plans for expensive and ambitious new weapons systems. Department officials have tried for years to make modest changes to military benefits, but every proposal has been met with stiff resistance on Capitol Hill and among a small army of influential veterans service organizations.
Personnel and related costs such as health care and retirement compensation now consume roughly half of the Defense Department’s budget. A July 2012 report from the Center for Strategic and Budgetary Assessments found that, if left unchecked, personnel costs will consume the entire defense budget by 2039, assuming the Pentagon’s annual budget rises only with inflation.
“We’re pricing ourselves out of the ability to fight,” said Todd Harrison, who authored the CSBA report.